China

Summary

China has the world's fastest-growing economy and is one of the world's top exporters. China is currently the focus of the majority of foreign investment and in turn also invests billions of dollars overseas. To provide a perspective – from being smaller than Italy’s, China has now gone on to become the world’s second largest economy.

China is a one-party state ruled by the Communist Party of China (CPC) and Communist ideology has now given way to market socialism. China is the current second-largest economy in the world, and it is even predicted by some to be overtaking the USA as the world’s largest economy (on a PPP basis) by as early as 2016.

China, like many other countries, was hit hard by the GFC crisis of 2009 but was one of the first global economies to bounce back quickly returning to growth. Alongside being the largest oil consumer after the US, China is also the world's biggest producer and consumer of coal. China heavily invests billions of dollars in pursuit of foreign energy supplies.

China is a member of the WTO and access to global markets has been fundamental to the success of China’s economic development. Open trade and investment movement will remain crucial for China's economic growth – now and into the future.

China has opened its economy, and expanded its engagement in international economic and trade forums. A member of APEC since 1992, China hosted the APEC Summit in 2014. China became a member of the World Trade Organisation in December 2001 and is also one of the ‘+6’ countries (along with New Zealand) seeking to join a proposed trade pact with ASEAN nations known as RCEP (Regional Closer Economic Partnership).

China is now our second largest source of tourists – over 240,000 in the year ending September 2014 (with a year on year increase of 2.7%). China’s tourists are now the world’s 3rd biggest spenders behind Germany and the US.

Each year, approximately 300,000 Chinese students head to Universities overseas. China is NZ’s largest source of overseas students with 24,682 Chinese students in 2014 - constituting 27% of the entire foreign student population in New Zealand.

Bilateral trade: NZ - China

New Zealand first established diplomatic relations with China in December 1972. China now is New Zealand’s second largest trading partner and one of its major sources of tourists and students. New Zealand was the first and only country to sign a Free Trade Agreement (FTA) with China in the year 2008. The NZ China FTA has resulted in significant growth of exports from NZ into China.

NZ’s annual exports to China reached NZ $11.3 billion in September 2014 (Ministry of Foreign Affairs & Trade). China has taken over Australia’s place as New Zealand’s number one export destination. Two-way trade has doubled since the FTA and NZ exports to China have more than quadrupled.

In 2014, two-way trade increased 2.63% from 2013 to $18.3 billion (after a 25% increase in 2013). A set goal of $20 billion in two-way trade was achieved in May 2014.

NZ Inc. China Strategy

In 2012 Prime Minister John Key launched the NZ Inc. China Strategy, New Zealand’s first whole-of-government plan with key goals over a 5 year period, which frame efforts by all government departments who work with China. Prime Minister John Key and President Xi Jinping have set a new goal for two-way trade to reach $30 billion by 2020.

Exports were $9.99 billion in 2014, up 0.25% after a 45% increase in 2013. Imports were up 5.6% to $8.3 billion. China has now become New Zealand’s largest export goods market, surpassing Australia. Total exports to China in 2014 accounted for 1/5th of New Zealand’s annual global exports. China is also New Zealand’s largest source of imports.